5 Ways to Get the Best VA Mortgage Rates


For service members, veterans and their families, it’s hard to beat VA mortgage rates.

VA loans they are insured by the US Department of Veterans Affairs and are available to most veterans, active duty military, reservists, National Guard members, and surviving spouses of deceased veterans.

Follow these five tips to prepare for a great VA mortgage rate.

1. Work on your credit score before applying for a VA loan

Your credit score will play a big role in determining your VA mortgage rate. While it’s possible to qualify for a VA loan with less than perfect credit, rates tend to go down as your score goes up.

Before you talk to lenders, look at your credit report and your three-digit credit score. Incorrect information, depleted credit cards, and overdue bills could be dragging you down. But this credit problems can be remediedand your patience and diligence will likely be rewarded with a better rate.

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2. Get quotes from at least three VA mortgage lenders

Rates, fees, and services vary by lender, so one lender’s cost of a VA loan could be very different from the next. Compare quotes from at least three lenders to avoid paying too much.

APR is often 0.20% to 0.25% higher than your interest rate.

When potential lenders provide a loan estimateFind the interest rate and the annual percentage rate, or APR. The interest rate tells you how much the lender will add to your monthly payment for borrowing your money, while APR it is the total price you will pay annually: interest plus fees. APR is often 0.20% to 0.25% higher than your interest rate. When comparing APRs, be sure to ask what fees are included.

Speaking of fees, pay close attention to closing costs, lender fees, and charges for things like an appraisal, credit check, and flood certification. Some lenders may waive these fees or charge less than others.

A non-negotiable rate to take into account is the VA Loan Financing Fee, which ranges from 1.25% to 3.3% depending on your military service, the amount of the down payment, and whether you’ve had a VA loan in the past. The VA financing fee affects the total cost of your loan, especially if it is included in the mortgage rather than paid up front.

3. Ask about state loan programs for veterans

VA loans are available nationwide, but your state may have additional military-focused loan programs to consider. If you meet the eligibility requirements, these programs may offer discounted rates, down payment assistance, and other benefits.

When comparing VA mortgage rates, ask potential lenders if they participate in state loan programs and how to find out if you qualify.

When comparing VA mortgage rates, ask potential lenders if they participate in state loan programs and how to find out if you qualify.

4. Consider making a down payment (or buying points)

It’s possible to get a VA loan with no down payment, but if you can afford a 5% or more down payment, it could mean a lower interest rate and reduced VA financing fee, saving you thousands over the life of a loan. loan. The statewide down payment assistance programs mentioned in tip #3 may be able to help with this if you’ve had trouble saving a down payment on your own.

When you buy points, you pay a lump sum up front in exchange for a lower rate.

To buy discount points it’s another way to get a lower rate on your VA loan. When you buy points, you pay a lump sum up front in exchange for a lower rate.

Although purchasing points costs more initially, it could lead to savings over time. A good rule of thumb is: only buy points if you can afford them and plan to live in the home long enough to break even; Otherwise, you may shell out for long-term savings that never materialize.

5. Choose the right loan for your needs

VA loans come in more than one flavor, including purchase, refinance, and mortgages for Native Americans and veterans with disabilities. So there are options within these types of loans. You can choose a VA purchase loan with a 30-year or 15-year fixed rate, or a 5/1 adjustable rate, for example.

Shorter loans generally have lower interest rates but higher monthly payments. Consider a shorter loan if you plan to live there for the full term and expect your income to remain stable. Adjustable Rate Mortgages, or ARMs, start with lower monthly payments, but that could change if rates go higher over time. An ARM may only make sense if you’re likely to move or refinance before the introductory rate expires.

How to Get the Best VA Mortgage Rates

  1. Check your credit for errors and debts that lower your score.

  2. Compare rates from at least three VA lenders and pay special attention to fees.

  3. Ask about state mortgage programs that offer discounts for veterans.

  4. Make a down payment, even if it’s not required.

  5. Choose the correct VA loan type for your needs.

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